Friends and Clients

Friends and Clients: Recently, the PR Treasury issued Informative Bulletin 16-02 to establish changes in the reporting for payments made. Beginning on 2016 all payments made for services that are not subject to withholding at source due to the fact that the provider has a valid Waiver Certificate must be reported on Forms 480.6B rather than on Forms 480.6A. In addition, the Withholding Agent must enter the control number of the Total or Partial Waiver Certificate that was assigned by the Department of treasury in the corresponding Form 480.6B. Also, to take a deduction on the Withholding Agent’s income tax return, it will be necessary to file the annual informative returns (480.6A or 480.6B) to the PR Treasury. If not, expenses related to payments for services made during the taxable year will not be deductible. In conclusion, every merchant should withhold a 7% to each service provider (subject to the rules imposed by the PR Internal Revenue Code “PR-IRC”) and file the corresponding annual Informative Declarations to take the expense as a deduction in the income tax return. Doing so, the Withholding Agent will avoid penalties imposed by the PR-IRC and will have the right to claim those payments as deductible expenses for income tax purposes. For further information, please contact us at HLB Parissi 787-641-9801.